(Atlanta, Georgia) – With inflation raging across America, a group of lawmakers in Georgia seek to end one of the strongest disincentives to owning and using gold and silver: capital gains taxes.
A tax-neutral bill introduced by Reps. Jordan Ridley (R–22), Jason Ridley (R-6), Powell (R-33), Horner (R-3), Persinger (R-119), and others, House Bill 895 would prompt Georgia taxpayers to remove from their reported state income all gains (or losses) tied to sales of gold and silver.
Georgia rightfully exempted the monetary metals from state sales taxes years ago. Removing income tax from the precious metals is the logical next step. By passing this bill, Georgia would join several other states in ending income taxation of the only form of money mentioned in U.S. Constitution.
Wyoming, Arizona, Utah, and Arkansas have already passed bills similar to HB 895. South Carolina, West Virginia, Missouri, Iowa, and others are considering such measures right now.
Several decades ago, monetary gold and silver -- and dollars formally redeemable in gold and silver -- were supplanted by the Federal Reserve note as America’s currency. However, an increasing number of Georgia citizens are realizing that holding gold and/or silver as a form of savings can help protect against the ongoing devaluation of the Federal Reserve note.
Here are a few reasons why House Bill 895 is good public policy:
- Current Georgia law assesses taxes on imaginary gains. Under current law, a taxpayer who sells precious metals may end up with a capital “gain” in terms of Federal Reserve Notes. This capital “gain” is not necessarily a real gain, it’s often a nominal gain that results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power.
Yet this nominal gain is taxed at the federal level – and, because Georgia uses federal adjusted gross income (AGI) as a starting point for Georgia income calculations, this nominal gain is taxed again by the Peach State.
- Inflation harms the poorest among us. Inflation is a regressive tax. The hardest hit are wage earners, savers, and pensioners on fixed incomes – as well as those who own few or no tangible assets.
- Taxing imaginary gains is harmful to citizens attempting to protect their assets. Investments in precious metals coins and bullion are rightly exempt from Georgia’s sales tax. Neutralizing Georgia’s income tax treatment of the monetary metals would remove the last major disincentive in Georgia that stands against the ownership and use of the monetary metals.
Policies that penalize savers in precious metals reduce the likelihood that Georgia citizens will take prudent steps to insulate themselves from the inflation and financial turmoil caused by Congress and the Federal Reserve.
Georgia is currently ranked 19th on the Sound Money Index. If HB 895 becomes law, the Peach State would be competing for a top spot against states like Wyoming, South Dakota, and Alaska, the three states currently atop the index.
More than a dozen states have introduced pro-sound money legislation in 2024 so far, including Alaska, Indiana, Iowa, Kansas, Kentucky, Missouri, New Hampshire, New Jersey, Oklahoma, Vermont, West Virginia, and Wisconsin.
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